Retailer sues registrars in $12m domain tasting suit

US retailer Neiman Marcus is suing two domain name registrars for more than $12m over their registration of names containing variations of its brand. The two linked companies are accused of improperly registering more than 40 domain names.

The case takes Name.com and Spot Domains to task over the relatively new phenomenon of "domain tasting". This is the practice of registering domains for five days then cancelling those that do not attract enough traffic. Taking advantage of a five day cancellation period, that practice costs the registering party nothing.

Within that five day period, adverts are published on the pages, and any page that receives enough hits to earn more than the $6 per year domain name registration fee is kept and paid for.

Often the pages involved are slight misspellings of famous names or trademarks which attract people who incorrectly type addresses into their computers.

The case accuses the companies of cybersquatting, trademark infringement, false designation of origin, and unfair competition in the District Court for the District of Colorado. It says some of the domain names registered and offered for sale by the registrars were "confusingly similar" to trademarks that belonged to Neiman Marcus.

The suit also says the sites were used to display adverts for competitors to Neiman Marcus. It says the registrars had no legitimate or fair use of the domain names and did not trade under any name similar to the domains it registered, which included neimancmarcus.com and neimanmarcucs.com.

"Neiman Marcus allege[s] that Defendants' acts are willful and malicious, and intended to injure and cause harm to Neiman Marcus," said the court documents lodged by the firm. It claims damages of $100,000 per domain name registered, which means that the total requested damages amount to more than $4m.

The suit goes on to say that because the alleged behaviour of the two registrars was wilful, Neiman Marcus is entitled to have its damages trebled, to over $12m. In addition to those damages, it says the company will ask for damages relating to trademark dilution and infringement, the amounts of which will be determined at trial.

Neiman Marcus has already taken a successful case against another registrar, Dotster Inc, which that company settled by promising not to register any domains connected to Neiman Marcus or its subsidiary retail chain Bergdorf Goodman.

The practice of domain tasting is said to be increasingly widespread because companies can set up automated systems to register hundreds or even thousands of domains and de-register them automatically. Reports claim that up to six million domains are tied up in tasting systems at any one time.